India’s leading public sector bank State Bank of India (SBI) offers multiple schemes to its customers to help them increase their income. One such scheme is its ‘Annuity Deposit Scheme’.
This scheme involves a customer depositing a principal amount for a fixed period. The bank, in return, pays them the same amount in Equated Monthly Instalments (EMIs) with interest.
The official website of SBI reads, “To enable the depositor to pay one-time lump sum amount and to receive the same in Equated Monthly Instalments (EMIs), comprising a part of the principal amount as well as interest on the reducing principal amount, compounded at quarterly rests and discounted to the monthly value.”
Scheme Highlights
- Scheme is available at all branches of SBI.
- Resident individuals, including minors, can benefit from the scheme.
- Customers can deposit the amount for 36, 60, 84 or 120 months.
- Deposit amount based on minimum monthly annuity of Rs 1,000 for the relevant period.
- Rate of interest provided in the annuity scheme is the same as that in fixed deposits, ie, 5.3 percent for deposits maturing in three to five years, and 5.4 percent for deposits maturing in five to ten years.
- Premature closure is allowed in case of death of the depositor. Customers should note that premature payment is also allowed for deposits of up to Rs 15 lakh.
- Premature penalty is chargeable as applicable to term deposits.
- Overdraft/loan up to 75 percent of the balance amount of annuity may be granted in special cases.
- After disbursal of OD/loan, further annuity payment will be deposited in the loan account only.
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